PARTNERSHIP PROGRAMS?A WIN-WIN FOR COMMUNITY PHARMACISTS
Ms. Sax is a freelance writer based in Chevy Chase,Md.
Despite many dreary forecastsabout the future of independentpharmacy, plenty of young pharmacistsdream of owning their ownpharmacies?and for good reason.?There is still enthusiasmfor community pharmacyownership among students,?said Stacey Swartz,director of managementand educational affairsfor the National CommunityPharmacists Association(NCPA). ?Owninga pharmacy allowspharmacists to be investedin their own businessand to use the skills theyhave been trained to provide.?
The problem is thatwhile young pharmacistshave the energy and ideasthat can make a businesssuccessful, they may lackthe funding needed topurchase a pharmacy. Ajunior partnership arrangementcan help makethe dream of ownership a reality.HOW JUNIORPARTNERSHIPS WORK
Under the arrangement, the sale ofthe pharmacy occurs over a specifiedperiod of time, with the junior partnerincreasing his stake in the businessas he takes on a greater share ofthe management. The senior partnertrains the junior partner to take overthe business, leading to a smoothertransition in management and ownership.
While the NCPA does not have aformal program that matches currentbusinesses with potential owners, theorganization often puts 2 parties intouch. ?We are particularly interestedin keeping independent pharmaciesopen,? said Swartz. ?Our membershipdemographic is [older than] 50 [yearsold], and it is best for owners to startthinking about an exit plan 10 yearsahead.?
Swartz recommends that pharmacistswork at the pharmacy as a residentor intern before committing to ajunior partnership. ?It is a good ideafor partners to work together forawhile,? said Swartz. ?I have had somepeople say that a junior partnership islike a marriage, so it is important thatthe 2 partners work well together.? Inmany cases, the senior partner becomesan invaluable mentor.
Chad Shedron, owner of FamilyPharmaCare in West Lafayette, Ind,began with the pharmacy as a resident.?The owner, Dennis McCallian,had given a lecture atButler University when Iwas a student about newways of practicing communitypharmacy, and Iwas very interested. Iliked the idea of havinglong-term relationshipswith patients, so the residencyappealed to me.?REWARDING ONMANY FRONTS
Shedron was teachingat Butler part-time, butincreasingly found communitypharmacy appealing.?I believe it isgood for the profession tohave as many pharmaciesas possible run by pharmacistswho are in controlof their own destinyand choose their locations,?said Shedron. ?When youthink of pharmacists, you think of theperson in the white coat around thecorner who you went to when yourkid had a 103[-degree] temperature. Iwant to be that person.? Thanks tothe junior partnership arrangement,he is.
In 2001, Shedron decided not toteach anymore. Coincidentally, Mc-Callian was interested in returning toacademia. A junior partnershipdeveloped. ?We laid out a time frameand a purchase price for the pharmacy,?said Shedron. ?We were really onthe same page. It all happened a littleahead of my schedule, but with Denny?sfinancial and professional assistance,I was able to do it.?
A mentor?s guidance meant a lot tothe success of the business. ?I do notthink you can teach ownership in aclassroom,? said Shedron. ?EverythingI learned about how to run apharmacy, I learned from Denny. Istill go to him with questions.?
Shedron says the first few years ofownership were hard work, but theeffort has paid off. ?During the first 4years I owned the store, I was thereevery minute the store was open,? hesaid. ?Over the last 2 years, I havebeen able to make my hours moreflexible.?
Family PharmaCare filled 85 prescriptionsa day when Shedron purchasedthe pharmacy. ?Last year, wefilled 120 prescriptions a day, and thisyear we filled 220 [per day].We haveseen a few pharmacies in town close,including one that had a durablemedical equipment business, so nowwe are in that business,? he said. ?Wehave really grown.?
The decision, said Shedron, wasdefinitely the right one for him. ?Ihad a customer the other day whocame in looking for Denny becausehe wanted his advice. Following inDenny?s footsteps is a big job, but if Iretire and people still come in lookingfor my advice, that would be thehighest compliment I could get.?ANOTHER SUCCESSSTORY
Lonnie Meredith, owner of TheDrug Store in Haskell, Tex, wasworking as a community pharmacistat an independent pharmacy in Dallaswhen he began looking for anopportunity to practice in a smalltown setting.
?When I moved to Haskell, it waswith the intention of owing a pharmacy,?he said. ?When I interviewedfor the position at The Drug Store, Idiscussed potential ownership withDoyle High, the owner. Doyle knewhe needed an exit plan and was lookingto the future, so it made sense forboth of us.?
Meredith said that the junior partnershipworked well. ?It can takehundreds of thousands of dollars tobuy a pharmacy outright, andyounger pharmacists often do nothave the funding,? he said. ?With ajunior partnership, you do not haveto come up with all of the cashupfront, and you have a mentor tolearn from without the pressures ofowning the pharmacy alone.?
He also learned how importantmentorship can be.While he broughtmanagement skills to the partnership,his financial skills were underdeveloped.
Over the 9 years he worked withHigh, Meredith learned a lot aboutrunning a pharmacy and benefitedfrom High?s 30 years of experience. ?Iwas pretty comfortable with pharmacymanagement,? said Meredith, ?butI learned that it takes a lot of time toget comfortable with the financialaspects of owning a pharmacy.?
It took about 5 years from the dayMeredith began getting a percentageof the business until he was able tocomplete the purchase of the pharmacy.The store is a success and isexpanding. ?The pharmacy is doingquite well,? he said. ?We fill about 330prescriptions a day.?
Meredith and High have openedanother pharmacy together and havetaken on a junior partner at that location.?Soon after I opened the pharmacy,a young pharmacist approachedme with the prospect of becominga partner in a pharmacy nearby. I hadjust become the owner of this store,and it was all I could handle, butDoyle said he would participate if Iwould,? he said.
The 2 partners are grooming theirjunior partner for outright ownershipwhen she is ready. ?Three generationsare involved in running thatpharmacy, and our skills all complementone another,? said Meredith.?Doyle is the big picture guy, and hehandles the financing. I am strong onmanagement, and our junior partnerhas strong clinical skills.?
The approach is one Meredith recommends.?The older partner providesexperience, while the youngerpartner provides more elbow grease,?he said. ?It is really an ideal situation,because young people are enthusiasticand want to work hard.? Pharmacistswho are looking to slow downcan hand the business over in a controlledway that can ensure a win-winsituation for both partners.
Meredith cannot imagine practicingin any other setting. ?When youwork for yourself, you are only limitedby your imagination?.When youown the pharmacy, you can try anythingyou want?the only thing thatlimits you is yourself.?